Asian Pay TV: Sustainable 1.05 Cents Dividend, a 13% Dividend Yielder

Asian Pay TV (APTT) has released its full year results.

Summary

• Total revenue declined by 5.4% due to sunset TV business
• Dividends of 1.05 cents, guiding for 2025 to be 1.05 cents
• Broadband Business Growth of 5%

Business Prospects

Revenue will keep falling at around 5% per year, this is due to the shift away from TV. CEO has commented the task now is to upsell customers to higher tier broadband plans to ensure revenue does not decline as much.

Sustainable Dividend

APTT generated 149 million in cash last year, I expect further decline to 145 million in cash this year.

Interest Cost is expected to grow as well to 42 million with the expiration of hedges. With Capex needs of 35 million and taxes of 13 million, APTT has 55 million in spare cash. Its current dividend payout of 1.05 cents equates to 19 million in cash. 

Hence, there is headroom to maintain its 1.05 SG cents dividend as it continues to use the excess cash to pay down the expensive Singapore offshore debt. I expect APTT to eventually become a $120 million annual cashflow generating trust still giving it the ability to maintain 1.05 cents dividend.

Good Dividend Stock to Own

APTT will continue to see revenue loss due to its large TV segment being in a sunset industry. However, dividend wise, APTT can maintain a 1.05 cents dividend.

So it is a good dividend stock to own as long as 10% dividend yield is maintained. At current price of 8.3 Sg cents, it is a good buy.

Yangzijiang Financial: More Stock Price Gain to Come

 Yangzijiang Financial Holdings (YZJFH) has delivered full year results which is within expectations.

Summary

• Earnings per share of 8.6 cents
• Dividends of 3.45 cents
• Earnings was boosted by china government grant (1 SG cents) and no more credit allowance provisions in losses

Currently YZJFH trades at a share price of 56.5 cents or SGD$1.98 billion market cap.

Earnings

As said, YZJFH recorded SG$40mil in government grant, SG$30 mil in exchange rate gains. I am sure this will not be replicated in FY 2025. However, as the company's debt investment portfolio continues to decrease, we might see more reversal in credit allowance which is a "gain". This will offset government grant income.

I expect YZJFH to log a 8 SG cents in annual earnings for FY2025. 02 reasons: first, its maritime investment business in Singapore is growing and second, the company will start reversing its credit allowance because its china debt investment is growing smaller.

$1,380 Million in Cash and Cash products in Singapore

One important point from the year end results is that YZJFH has transferred a significant amount of cash from China to Singapore. With the cash in Singapore, it can be easily verified and reduces the allegations that the cash items in its balance sheet is fake. 

The total amount of funds in Singapore cash and yield enhancement produces is now SGD$1.380 billion. The company has 52 cents in cash equivalent products. This means 90% of its current market cap is in easily realised assets. 

Cheap at Current Price 

Even at 56.5 SG cents, the stock is way too cheap. At future 8 SG cents earnings and 3.2 SG cents dividend, this stock is at least a 5% dividend yielder. Hence target price is at least 64 SG cents.

However, I do not think this is a fair value as it slowly winds down its China debt investment, with continuing share buybacks, YZJFH should march towards a $1.20 NAV. Putting it at 0.8 times price book, it is 96 SG cents. There is a lot more upside to go.

<Author is vested in YZJFH>

Portfolio Update Feburary 2025 - U-Turn on Keppel REIT Due to Decline, Partial Sale of Alibaba

Due to the run up in share price, I have taken profits off Alibaba.

About 12% of my stake in Alibaba was sold. I will hold the rest of the stake until it reaches HKD$210 (my estimated forward PE of 25). Should Alibaba return to the HKD $100-$125 region, I will start to buy back what i sold off.

Portfolio

Using the sales proceed from Alibaba, I have bought (i) Keppel REIT and (ii) PRIME US REIT.

Previously, I wrote why I would not buy Keppel REIT. However since then, it has fallen 7% post ex-dividend and become a fair value/hold at 81 SG cents. As I have said, the true dividend of Keppel REIT is 5 SG cents and with rental reversion and interest rate being lower, it can go up to maybe 5.3 SG cents. This translates to a 6.5% yield. Many of Keppel REIT properties are in prime areas and buildings are of the Trophy-Grade A status. So i do believe in the flight to quality story and the resiliency of its tenants.

On the assumption the REIT is a 5 SG cents yielder and if it becomes a 5% prospective yielder at $1, I will sell. 

PRIME US REIT is another addition and I do not need to repeat why I think it is a buy.

Dividend

Unitedhampshire REIT and Asian Pay TV Trust has announced dividend within expectations and are of good yield. However, as they will pay it in March 2025, I will not count in this post.

So dividend collected this year has remained at $0.

The portfolio now has a value of about $827,000.

UnitedHampshire Retail REIT Year End: 8+% Dividend with Potential Capital Gains. A Top Pick

 Unitedhampshier ("UHREIT") has announced its year end results. In summary:

• Leverage is down to 38.9%
• Annual Dividend is 4.06 US Cents
• Rental Escalation
• Interest Coverage Ratio of 2.5 times

Outlook

Impressive results throughout with revenue growing due to rental escalation. Its cost of interest seems to have peaked with interest now falling for 4Q.

Overall, I expect UHREIT to increase dividend due to higher rentals + possibility of the REIT manager electing to be paid in Units should share price hit 60 US cents.

Capital Gain

Often people says investing in REIT is for the dividends and not capital gains, however UHREIT may buck the trend- it offers both. With greater appreciation by investors of the resilience of its sub sector (groceries), investors will  be aware of the resilience in its dividends and find the REIT a steal at 48 US Cents (8.4% yield). I do think a re-rating will occur where it becomes a 7% yielder. 

In addition, I forsee with interest rate falling and revenue growing, the DPU of UHREIT will be 4.1 US cents for 2025 despite the divestment of 1 property. At forward 7% yield, I am guiding for UHREIT to be 64 US cents in 2025. 

UHREIT is exceptional and will best any Singapore property. It is going be a dividend yielder + capital gain giant for 2025. It should be worth its NAV of 75 US cents because of the annual profits it is clocking. With the fall in interest rates, its dividend will start to rise from its annual 4.06 US cents dividend.

Spending for Jan 2025: Hit $800

Previously, I had covered how I plan to budget my approximate $755 spending in credit cards for daily neccessities around Maybank Family and Friends Card.

Performance for Jan 2025

Total expenditure was $829 with $52 in cashback clocked.

Grocery Spending is High Due to Inflation

Close to my estimates, grocery remained expensive coming in at $410 per month. About $50 came from dining because F&B outlets withing supermarkets have the same MCC code of supermarket for Donki and NTUC fairprice.

Grocery expenditure will continue to form bulk of my expenses as I continue to prepare my meals to eat, drink and continue living in this world (sorry for being morbid, but harsh facts of life)

Spending Behaviour

Despite spending less on outside food, I incurred a medical cost at a government clinic, so it helped to reach the $800 minimum spending. 

Front loading was done due to an Eight Telecom Mobile credits promotion where if we top up $28 in credits we get $38 credited instead. This was bought on shopee. I also bought $20 of NTUC voucher on shopee to clear my shopee coins which offered me a final 25% discount off NTUC vouchers

My grocery spending in February might be slightly lower as I will burn through the the $20 NTUC voucher and not eat at F&B outlet within supermarket. For Feb, it is likely dining & groceries will be in the $300 range. Actual e- commerce expenditure might be zero. So I will be short of about $100 in estimated expenditure. Front loading might be needed. Dosen't help that Feb only has 28 days.

Transport

One thing I learnt is that Simplygo transactions takes a while to be posted to credit cards. For the month of Jan, my EZ link transportation fares from 24 Jan have not been calculated. As such they will only be charged in Feb. So the positive is that likely my Feb transport fare will be a lot higher. This will help me reach the $800 spend easier.

LINK REIT (0823.HK) : Best REIT for Dividend Income at 8% and How Singaporeans can Buy It

While many singapore dividend investors will praise how good the Capitaland and Fraser Group of REITs are for dividend at 4-6% yield; there is one REIT that has a lower leverage, a more diversified portfolio and of a higher dividend yield than any REIT in Singapore at 8.3%.

This is the largest REIT in Asia and with a REIT manager model which has been praised by Straits Times.

LINK REIT- 8.3% Dividend, Not Taking Debts to Sustain Dividend, 20.6% Leverage Ratio

The title says it all, perfectly sustainable REIT, low gearing at 20.6% that no other Capitaland REIT has been able to match. To cap it off, it maintains a sustainable payout ratio for dividend not overleveraging itself.

I am not kidding, these are facts as listed in its report [See Slide 9. From here on, I will be referring more to its slides as I don't wish to printscreen everything into infographics. Readers can click on the link to view the presentation alongside this article]

Debt Profile

Being such a large REIT in Asia and with a strong balance sheet, LINK REIT has an A rating from major credit rating agencies, something that even Singapore REITs are unable to achieve. Due to its strong credit rating, its borrowing cost is at 3.69%. 

On Slide 38, it is revealed LINK REIT has 55% debt in RMB and 24.5% debt in SGD. The borrowing cost of these 02 currencies are now reducing and this means LINK REIT's all in borrowing cost will reduce in time to come, this will improve distribution per unit and justify the story of a REIT with growing distribution.

Higher Occupancy

Most of LINK REITs properties have 95% or higher occupancy rates, it shows how good the proeprties are located and highly sought after.

Essential Services Tenant Mix

In terms of tenant profile, LINK REIT is closer to that of Singapore's Fraser Centrepoint Trust, it positions itself as a neighbourhood mall catering to the masses with no luxury malls brand name like Paragon or ION orchard.

In Slide 64-68, it can be seen that in Hong Kong, its top 3 tenant types are the essential services of supermarket, market stalls and F&B which forms close to 60%. In Singapore and China, the essential services segment forms 40% of the tenant mix. Hence despite the downturn in 2 of its markets, many of its tenants have registered lower than national average decline (after all, they are essential services, essential for the livelihood of the people)

Revenue Growth and Internal Manager Model

Despite the weakness in retail, the usual positive rental reversions have helped LINK REIT report a larger revenue. Singapore was a strong point where rentals went up by 18% in Jurong Point and Thomson Plaza.

LINK REIT uses an internal manager model. Unlike Capitaland and Fraser REITs, where a percentage of the distributable income goes to another company; there is no loss of revenue in rental income within LINK REIT. Hence in a time where distributable income is growing, all the gains are given to Unitholders of LINK REIT. Even if they acquire new malls, only the Unitholders benefit. 

It is a model superior to Singapore's but Capitaland, ESR and Fraser Property refuses to give up on because of the loss in profits. There is no conflict of interest within LINK REIT. Unitholders can be assured the REIT is shareholder friendly and always acts in the interest of Unitholders.

Diversified Portfolio

While it does have majority of its portfolio in Hong Kong and China, there is a significant portion in Singapore and Australia. In Singapore, the REIT owns Jurong Point, Thomson Plaza, Ang Mo Kio Hub and is one of the largest retail landlord here.

So Unitholders are not entirely exposed to China and HK markets. And as said, their tenant profile here are close to the essential services on virtue that these malls are positioned as neighbourhood malls.

Many Positives

The icing of the cake is of course how low the leverage of the REIT is at 20.6%; this is because the REIT is not forced to buy overpriced properties from a parent company and demonstrates how the internal manager model has no conflict of interest. LINK REIT tends to buy only properties when there is strong returns for its unitholders, it does not have any conflict of interest where a parent company will try to monetise profits at the expense of a child REIT.

All distributable income it earns from its portfolio of properties worldwide goes to Unitholders. As of its price of HK$32.1, it is now at 8.3% dividend.

As said in its debt profile, its all-in interest cost is set to go down because China and Singapore is facing an environment of lowering interest rates. This is a positive and possibility of growing its dividend per unit. 

I will not be surprised that the REIT will end up giving HK$1.6per semi-annually by 2030 due to positive rental reversion and lower interest expense. It will make the REIT a future 10% dividend yielder. 

As of now LINK REIT is already giving HK$1.34 per semi-annual basis.

At an assumption of a dividend of HK$3.2 and a 6% dividend yield, I have a target price of HK$53 for this REIT.

What I am Doing

I am definitely interested in this REIT. In an environment where Singapore REITs are using more leverage and yet giving less yield than LINK, I would invest more in LINK REIT. Yes there is exchange rate risk and commission from changing my currency from SGD to HKD. But I think it is worth it.

Every year, I will be earning 3% more in dividends and if I keep LINK REIT for 3 years or when it reaches my target price, it will exceed any returns if I had kept my money in Singapore REITs. 

While Sing Dollar has appreciated about 1% annually against the HKD dollar, I still have 2% more in dividend as upside. As such I will keep minimal Sing Dollar but transfer most of it to HK Dollar to purchase LINK REIT. My exposure to LINK REIT will grow from its current 5,500 shares (when the price is right) and it will become one of my larger dividend contributor.

How Can Investors Buy LINK REIT in the Hong Kong Exchange

The digital brokerages of Moomoo, Tiger and Webull has access to the Hong Market. All Singapore investors have to do is (I) sign up for an account, (ii) tick the option to trade in the Hong Kong Market, (iii) deposit money into these digital brokerage account and (iv) pay the the approx 0.5% exchange rate fee to convert SGD to HKD and you are all good to buy LINK REIT (Code Symbol 0823.HK).

Alternatively, the traditional brokerages of DBS, OCBC, Maybank, UOB Kay HIan also allows you to buy HK stocks but you need to complete a few forms to get things processed and done. They allow foreign currency conversions as well.

But I will still recommend using the first option of digital brokerages because they are easier and have less commission. Currently, I am not paid or is being sponsored by them, so you can be assured my intent is not financial nor have conflict of interest.